BSE-listed Firms Join $4 Trillion Market-cap Club With US, China, Japan And Hong Kong
The Indian equity market witnessed two major events in Wednesday's trading session. While the stocks rallied and reached new highs, and IPOs listed with magnificent gains, the Bombay Stock Exchange (BSE) entered the USD 4 trillion club, and Nifty reclaimed its 20,000 levels after a dip caused by geopolitical tensions and macro-economic factors.
The combined market valuation of all listed firms on BSE crossed Rs 3,33,26,881 (USD 4 trillion) in the early trading session. So far, the market cap of all listed firms on BSE has increased to Rs 50.81 lakh crore.
The BSE reached the USD 1 trillion and USD 3 trillion milestones on 28 May 2007 and 6 June 2014, respectively.
This milestone signifies BSE's inclusion in the USD 4 trillion club, joining other peers such as the US, China, Japan, and Hong Kong.
The BSE representative benchmark index, Sensex, settled with more than 700 points gains or a 1.1 per cent increase in Wednesday's trading session.
“The Nifty's recent crossing of the psychological level of 20,000 and the BSE market cap's ascent to the USD 4 trillion mark signal the start of a fresh momentum. Domestic liquidity has provided support, but the lack of foreign inflows due to high US bond yields has been a hindrance,” said Santosh Meena, Head of Research, Swastika Investmart.
Fortunately, interest rates in the US have peaked, and the dollar index is declining, which is expected to attract foreign institutional investor (FII) inflows into the Indian equity market. Despite strong fundamentals, volatility is expected leading up to the state election results. However, any weakness caused by this could present a compelling buying opportunity, added Meena.
He further added, the market appears primed for a pre-election rally, and we can anticipate the Nifty soon surpassing 21,000, with 19,500 serving as a support level.
According to Bloomberg data, India's market capitalization has increased by about 15 per cent year-to-date (YTD), while China's has alleviated by 5 per cent. The US is the only market in the top ten in terms of market cap that has outperformed India, with its 17 per cent growth. This year, the aggregate global market capitalization increased by 10 per cent to USD 106 trillion.
“BSE has achieved a historic milestone, with its market capitalization crossing the $4 trillion mark for the first time. This expansion is poised to sustain momentum as the prospect of foreign investors redirecting their investments towards India, spurred by this dovish stance, serves as a compelling catalyst for the continued growth of the Indian equity market,” said Arvinder Singh Nanda, Senior Vice President, Master Capital Services.
Several international brokerages, including Goldman Sachs, JPMorgan, Morgan Stanley, and CLSA, have recently suggested a higher allocation to India in the emerging market and Asia Pacific baskets. The US-based brokerage firm upgraded its rating for Indian markets to 'overweight' earlier this month.
The top five firms on BSE in terms of market cap include Reliance Industries, TCS, HDFC Bank, ICICI Bank, and Infosys. The bourse is also listed on the National Stock Exchange (NSE) and has rallied 347 per cent year-to-date. The BSE stock settled with a 3.36 per cent gain on Wednesday's trading session.
“We’ve had a good results season recently in India and part of it could be attributed to a possible pre-election rally. India stands out in the world and as an alternative to China and domestic liquidity continues to be strong. Our banks are well provisioned and capitalised, our corporates are deleveraged and there’s no housing bubble in India,” said Amar Ambani, Group President and Head, Institutional Equities, Yes Securities India.
